IN NOVEMBER 2000, Julian and I had gone to Russia. He had been hired by Maclean’s to examine one of the men accused of ethnic cleansing in the former Yugoslavia. I went along to see whether I was ready to face a few of my own demons. On November 7 we were in St. Petersburg—called Leningrad when I was in primary school—and watched a group of elderly Russians march under red flags displaying faded hammer-and-sickle emblems, celebrating the 1917 Revolution. I remembered the long, boring parades of my childhood, when every citizen was expected to march to Heroes Square in Budapest to honour our Soviet “liberators” and listen to endless speeches from the leading Comrades.
I also remembered them in their tanks in November 1956, when their swivelling turrets destroyed much of the city of my birth, including the small flat my mother and I had shared. As Julian and I were ambling through the Hermitage Museum looking at his beloved Rembrandts, about fifty young Red Army recruits passed by, and I had to grab Julian’s arm to stop myself from screaming.
Is the past ever really past?
When the World Trade Center Towers in New York were destroyed by Islamic terrorists on September 11, 2001, I was in the third-floor Key offices watching CBS News. Someone had called me upstairs when the first plane hit. There were about a dozen of us that morning, all of us silent. Disbelieving. Downstairs in our office, I was greeted with shocked silence. I told everyone to go home and hug the people they loved and not to bother coming in the next day.
For Key Porter, the twenty-first century began not with a terrible bang but an extended whimper. Entrepreneur Heather Reisman, having wrested control of Chapters from Larry Stevenson, announced “the purge of about $40 million” of books to publishers for full credit, and the shutdown of at least twenty stores. Our bankers had not yet recovered from the 1990s, when independent bookstores kept disappearing and library budgets were being slashed. Now publishers were struggling to understand a fiercely competitive retail marketplace that included Costco and an ambitious online outlet called Amazon. Our distributor, General Distribution Services (GDS), was tottering under the onslaught.
In self-defence, we had been selling illustrated books directly to Chapters in Canada, to Barnes & Noble, Costco, and Price Clubs in the United States, to American promotional and remainder merchants, and to a variety of door-to-door businesses. We had even created books specifically for this market, producing heavy mock-ups with art or photographs and dummy text that I lugged to meetings often lasting only fifteen minutes. Invariably we were told to think bigger but at a lower cost. I imagined that selling non-returnable into these markets would give us operating income to support our regular publishing of Canadian books. We made Dudley Witney’s The Farm, The Children’s Treasury, several pretty wildlife books (the same animals but we billed them Canadian for Chapters, American for Barnes & Noble), a couple of books about wildflowers (who can tell the difference between our wildflowers and US ones?) and loons, an American national parks book, and other assorted stuff about mountains and rivers that we called “merch,” short for merchandise.
Having just been to Romania, I proposed a book about vampires to Barnes & Noble. They liked the concept, the price, the number of pages, everything, except that they wanted it in two months. I agreed, on the assumption that I would find someone to write it very quickly. When I couldn’t, I ended up writing most of the book myself with an assist from a co-author film buff who supplied words about vampires in movies. I did Vlad the Impaler and his successors. The book, I am surprised to discover, is still in print.
We also explored ways of increasing our size and, therefore, our clout in the Canadian book market, imagining that if our annual income doubled or tripled, we could demand better terms from “the chain,” from Amazon, maybe even Costco.
I had had long, enjoyable meetings with my colleague Scott McIntyre to discuss how such an affiliation or even a merger could work. We had now been friends for more than thirty years, had grown to know what each of us cared about and why we were devoted book people. We had both been members of the small group—known at the time as “the junta”—elected in 1991 by the Association of Canadian Publishers to lobby the government.I Scott’s company, Douglas & McIntyre, was the star of West Coast publishing. We were both known to be innovative at home and respected internationally. We both sold books all over the world.
Scott and I sometimes had dinner in Frankfurt during the Book Fair, and in Paris after Frankfurt. Scott took many pages of notes and calculated whether we could save money by merging. We thought we could, as Scott was fond of saying, “create a major.” However, Scott’s dream of “a major” included Jack Stoddart of General Publishing, whose sales were about the same as Key Porter’s. Since Jack Stoddart’s General Distribution Services supplied warehousing and shipping for all of us, it seemed to be a marvellous idea to invite Jack to our discussions. If the two of us together could be influential, imagine how influential the three of us together would be! Better still, the combined firms would prove to be an attractive investment for outsiders. Scott and I had a number of very encouraging meetings with potential investors.
I wrote a long letter to Jack Stoddart on November 7, 2001, proposing a corporate structure that was predicated on merging Key Porter, Douglas & McIntyre, and General Publishing. It was an elaborate plan, partly devised by our CFO, Allan Ibarra. I still think it could have saved all three companies. I hoped that if we merged, Scott would run the company day-to-day and I could maybe write the book that had been gnawing at me for a couple of years. It was about the Holocaust in Hungary and an unusual person who had both the courage and the imagination to come up with a plan to rescue more than seventeen hundred Jews.
We didn’t know that Jack Stoddart had been teetering on the edge for a couple of years. There had been problems with his bankers, but he had found another bank, an American lender called Finova. He still had a confident strut, a cheery smile, and, I thought at the time, a great relationship with Sheila Copps, the federal Heritage minister, because Jack usually attended her functions. When he suggested that Scott and I go to Ottawa and cajole the government into a short-term investment of $5 million, we believed it was all for a good cause.
But we were wrong. After sustaining about sixty per cent returns of inventory from Chapters, and after Finova itself went bankrupt, General Publishing, including GDS, sought bankruptcy protection in April 2002.II That the announcement was a shock to me would be an understatement. GDS’s gargantuan warehouse held all of Key Porter’s books and we were among the many unsecured creditors. Overnight, we had no income from our Canadian sales. Our banker noted the news with alarm. Our plight was exacerbated by the decision of a judge that all our receivables belonged to GDS, which had but one secured creditor: its bank. In The Perilous Trade, Roy MacSkimming gives a full account of the disastrous effect on GDS’s client publishers, including us.
I spent some months reeling from the blow, more months trying to get our books out of the warehouse and pick up the pieces. Most of our authors and many of Jack Stoddart’s were calling in panic to see if their royalties would ever be paid (I know we paid ours). God knows, it’s hard enough to make a living as an author even if your royalty cheques show up on time. What may have saved Key Porter was our early decision not to put all our eggs in one basket. While we had no income and, for a long time no books to sell to bookstores, we had those Barnes & Noble, door-to-door, and bulk sales to other countries. I remember a phone call from a reporter covering the story of our plight (many others, including D&M, were in the same pickle). He asked when we had last been paid by Stoddart and I told him, “Moses was still in short pants when we had our last cheque.”
Eventually, we bought our books out of GDS’s warehouse and moved them to H. B. Fenn, our new distributor. I had known Harold Fenn for a long time and he had always seemed stable, amiable, and reliable.
Though he was always willing to have one more discussion about Key Porter’s future, Michael de Pencier was obviously preoccupied with selling Key Publishers to St. Joseph Corporation. His interests and enthusiasms had shifted from magazines to the environment. Throughout the eighties he had been involved with the Young Naturalists Foundation and with the Royal Canadian Geographical Society’s Canadian Geographic, and he was on the board of the World Wildlife Fund. His new venture, Investeco Capital, would be Canada’s first “green” investment company.
It didn’t take a genius to discern that Michael had moved on. I didn’t blame him. The writing was on the wall.
* * *
IN 2003 I asked Harold Fenn whether he would be interested in buying Key Porter. It was a difficult decision for him because publishing required a lot of cash for author advances and manufacturing. The kind of business Harold was in—distribution—worked in reverse: you sold other companies’ books, collected, took your percentage, and sent the rest to the publisher who had produced the books. Unsold copies were usually returned as well, so you didn’t have to finance mountains of inventory. However, Harold’s son, Jordan, had taken a course in publishing and wanted to be a book publisher. So Harold was interested.
In July 2004, Michael and I sold most of our shares in Key Porter to H. B. Fenn. There was a seemingly endless array of papers to sign in Harold’s lawyers’ steel and glass tower offices. Now and then I pretended an avid interest in the skyline, walked over to the windows, and muttered something about birds. Only Julian, who had come with me that day, knew that I was crying.
As part of the deal, I had to agree to stay on in some undefined capacity to finish a few projects and to ease Jordan into the role of publisher. One of Harold’s first decisions was to move our offices from The Esplanade to Adelaide Street, into one of those dull buildings that define the street east of Yonge. While I was sad to leave our lived-in premises, I was relieved that I would not be haunted by memories of happier times.
I. The other members of our group were Karl Siegler of Talon Books, Philip Cercone of McGill-Queen’s University Press, Louise Fleming of Ragweed, and Randy Morse of Reidmore Books. Roy MacSkimming was “interim director” coordinating our efforts.
II. For more detail, see The Perilous Trade.